For two centuries, America’s free market has not only been the source of dazzling ideas and path-breaking products, it has also been the greatest force for prosperity the world has ever known. That vibrant entrepreneurialism is the key to our continued global leadership and the success of our people.

But throughout our history, one of the reasons the free market has worked is that we have sought the proper balance. We have preserved freedom of commerce while applying those rules and regulations necessary to protect the public against threats to our health and safety and to safeguard people and businesses from abuse.

From child labor laws to the Clean Air Act to our most recent strictures against hidden fees and penalties by credit card companies, we have, from time to time, embraced common sense rules of the road that strengthen our country without unduly interfering with the pursuit of progress and the growth of our economy.

Sometimes, those rules have gotten out of balance, placing unreasonable burdens on business—burdens that have stifled innovation and have had a chilling effect on growth and jobs. At other times, we have failed to meet our basic responsibility to protect the public interest, leading to disastrous consequences. Such was the case in the run-up to the financial crisis from which we are still recovering. There, a lack of proper oversight and transparency nearly led to the collapse of the financial markets and a full-scale Depression.

Over the past two years, the goal of my administration has been to strike the right balance. And today, I am signing an executive order that makes clear that this is the operating principle of our government.

This order requires that federal agencies ensure that regulations protect our safety, health and environment while promoting economic growth. And it orders a government-wide review of the rules already on the books to remove outdated regulations that stifle job creation and make our economy less competitive. It’s a review that will help bring order to regulations that have become a patchwork of overlapping rules, the result of tinkering by administrations and legislators of both parties and the influence of special interests in Washington over decades.

The business community is praising President Obama’s new regulatory initiative, while retaining a degree of skepticism that meaningful change will come.

Obama rolled out a plan this morning to minimize the burdens of regulation on businesses, introducing it in a Wall Street Journal op-ed. Obama said the administration will seek input from businesses, and he issued a memo and executive order requiring executive agencies to review existing regulations and make compliance info searchable online.

“We welcome President Obama’s intention to issue an executive order today restoring balance to government regulations,” said Thomas Donohue, president and CEO of the U.S. Chamber of Commerce, the nation’s most prominent business group.

“While a positive first step, a robust and globally competitive economy requires fundamental reform of our broken regulatory system. Congress should reclaim some of the authority it has delegated to the agencies and implement effective checks and balances on agency power,” Donohue continued, in a statement issued by the group.

Health care and financial reform should be examined as well, Donohue said: “No major rule or regulation should be exempted from the review, including the recently enacted health care and financial reform laws.”

It remains to be seen what will come out of this new roll-out. Obama has held a tricky relationship with business as president: Business coalitions like the Chamber supported his stimulus plan at the outset of his presidency, but the pushes to reform energy, health care, and Wall Street didn’t thrill them as much.

It reaffirms the basic principles outlined in President Clinton’s Executive Order 12866, issued in September 1993, and continues to require agencies to conduct cost-benefit analyses of proposed rules. As noted in the President’s op-ed, it also requires agencies to engage in “retrospective analysis” of existing rules so as to accelerate the pace at which outdated regulations are revoked. Specifically, it requires all agencies to develop a plan for such retrospective review within 120 days. If the White House Office of Information and Regulatory Affairs ensures such reviews are meaningful, this could be a significant and positive step.

While the Sherlock Homes of 1600 Pennsylvania sleuths around in search of “the right balance” that they’ve skewed catastrophically over the last two years, the mother of all job creation-stifling regulations — Obamacare — awaits repeal.

Of course on the other side of that are those saying “since when is it a function of government to decide what gas mileage a car must get?” The entire premise that it is a function of government is built on belief in a “justified” level of intrusion far beyond that which any Constitutional scholar would or could objectively support (that’s assuming he is a scholar and an honest one). In fact the example perfectly states the obvious difference between big government advocates and small government advocates. BGA’s think it is government’s job to dictate such things – that it is a function of government to do so. SGAs believe it is the market’s job to dictate such things and that government shouldn’t be involved in these sorts of things.

So in essence, while the Obama op/ed has all the proper buzz words to attempt to sell it as a pro-business, small government move, it is in fact simply a restatement of an old premise that essentially says “government belongs in the areas it is now, we just need to clean it up a little”.

This really isn’t about backing off, it’s about cleaning up. It isn’t about letting the market work, it’s about hopefully making government work better. And while Obama claims to want to inform us about our choices rather than restricting them, I’ll still be unable to buy a car that doesn’t meet government standards on gas mileage even if I want one.

Now that may not seem like something most of us would want – few if any of us want bad gas mileage and the cost it brings – but it does illustrate the point that government regulation really isn’t about providing choice at all, it is and always will be about limiting them. And all the smooth talking in the world doesn’t change that. It’s the nature of the beast.

The president’s last executive order was signed between Christmas and New Year’s. It codified the bias in hiring towards college graduates (and more and more in America, those without college degrees will never have access to decent work!), but at least demanded the creation of entry level positions in the government for recent college graduates and veterans. The Wall Street Journalextends a statement from the president today, promoting his new executive order, which we shall call Operation Untangling. The plan apparently means that every government agency must identify which of their regulations are stupidest, and make them go away, supposedly. For instance, Obama trumpets that they just changed the EPA regulations that ensured saccharine was treated as a toxic chemical. American, onward and upward, very, very slowly. Anyway there’s lots of dog whistle noises in here about business and regulation that are designed to appeal to particular people but judging from the reaction, it’s just another chance for everyone to complain from various opposing viewpoints about how America is broken.

It’s fine as far as it goes. Here’s where it would be helpful if Obama picked some fights and put out some reform markers, because I can’t tell if this is just cover to go after proxy access rules as a way of making peace with the business community. It’s worth noting that, as far as I read it, we’d have the same exact financial crisis, the same criminal securitization chain, the same uncapitalized derivatives positions, the same shadow banking panic if we regulated the financial sector with these guidelines.

And the things that actually acted on these principals in the past two years – the CFPB which has consolidated regulatory burdens across agencies in order to make regulations more clear, interchange reform which created a market between credit cards and debit cards to de facto create a market rate of credit at the individual merchant level – were bitterly opposed by the industries in question.

More generally I don’t like the notion that regulation is conceptually some sort of brakes on markets, a dial that can be turned up or down until some sort of optimal space is hit. I think of regulation as a means of handling the consequences of a specific market, both by setting up the terms on which the market plays as well as the mechanisms for handling conflicts and the way things collapse. How does a firm fail? How do other firms compete, and under what terms is information disclosed to the market? In some ways this is obvious: the nuclear energy market would not exist in its current form without the government. I’d be more likely to support for crazy loans if our bankruptcy courts were designed to modify primary household debt and also if we reformed the bizarre way we deal with junior liens, a conflict people knew about at the beginning of the housing bubble.

And here‘s the underlying Wall Street Journal op-ed by Barack Obama, which features an illustration of a man — not Obama… he looks a bit like Don Imus — in a gray business suit, running with scissors — running with scissors! — cutting his way through an abstract field of red tape. In the op-ed, Obama is all about carefully and thoughtfully weighing the value of particular regulations in relation to the burdens they impose, so the picture is amusingly inapt.